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The Straits Times reported that an Air India flight from Thailand’s Phuket to New Delhi plunged 91 metres mid-air earlier in August, injuring 24 passengers. Subsequent reports indicated the captain tested positive for marijuana after landing, which prompted the carrier to order a one-time drug screening for its full roster of pilots. A separate parliamentary panel audit identified around 100 safety lapses at the airline, including seven that required urgent corrective measures and recurrent training shortfalls for Boeing 787 and 777 pilots.
Shakti Lumba, a former airline operations chief, said the safety culture at Air India is lax. The episodes have directed attention toward regulatory and operational deficiencies across the sector, which has experienced rapid consolidation. Observers point out that problems at the two dominant carriers carry outsized consequences given their commanding positions in the market.
ICRA estimated that Indian airlines face nearly $4 billion in combined losses for the current fiscal year. Air India’s losses more than doubled to $2.3 billion in the previous fiscal while IndiGo recorded losses across two successive quarters. Rising jet fuel prices connected to conflict in the Middle East have intensified these pressures, according to the ratings agency’s assessment.
IndiGo terminated its wide-body services in July as Air India considers deferring deliveries of up to 500 aircraft. Directorate General of Civil Aviation figures show domestic passenger traffic advanced only 1.44 percent in the first half of 2026 to 86.4 million travellers, with IndiGo securing a 64.3 percent market share over that span. The modest expansion marks a departure from the stronger growth rates recorded in earlier periods.
These developments signal a reversal for an industry frequently cited as one of India’s premier economic achievements. Prime Minister Narendra Modi had described the airline sector as a symbol of national progress only a year earlier. The accumulated crises have laid bare structural vulnerabilities that threaten sustained development.
Separate industry analyses indicate that the near-duopoly held by IndiGo and the Air India group, which together account for nearly 90 percent of domestic seats, has amplified the effects of disruptions at either carrier. This market concentration coincides with ongoing infrastructure limitations and workforce pressures previously flagged by regulators. Such conditions have already triggered official interventions following earlier operational failures.
